On 18 December 2020, the OECD published Guidance on the transfer pricing implications of the COVID-19 pandemic (“OECD Guidance”) providing guidance to taxpayers when applying the arm’s length principle and applying the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations 2017 (“OECD TPG”) for periods impacted by the COVID-19 pandemic.

This guidance emphasizes the use of the existing OECD TPG and the arm’s length principle to tackle difficulties caused or aggravated by the COVID-19 pandemic. It focuses upon transfer pricing and operating transactions but notably does not deal with transfer pricing of financial transactions such as interest on intragroup debt, other important intracompany transactions, such as management fees, are also not dealt with in the OECD Guidance.

The OECD Guidance should not be viewed as an extension nor as a modification of the OECD TPG.

Read publication We are pleased to enclose the June issue of Tax News and Developments, a publication of Baker McKenzie’s North America Tax Practice Group. This month’s edition features Proposed Regulations on Deductibility of Certain Fines and Penalties and Related Information Reporting Retirement Relief Provisions Accessible to More Taxpayers and…

Companies want and need to take action to deal with the uncertainty caused by COVID-19, or to take measures to enable their operations to weather possible outbreaks or similar events in the future. Those actions have transfer pricing implications, and if companies have an Advance Pricing Arrangement (APA), or are…

Governments and central banks around the world are struggling to address the COVID-19 pandemic and its impact on the economy. While certain governments may mitigate the crisis by doing whatever it takes, businesses are still required to operate and transact with their international affiliates at arm’s length as prescribed by…

The COVID-19 outbreak has led many countries to implement border controls as a temporary measure to curb infections, and many employers find their employees working from home or in locations outside the jurisdictions where employers typically operate or are located. International travel restrictions affect Boards of Directors and employees of…

The Canadian federal, provincial and municipal governments and courts have announced measures to provide relief to taxpayers in light of the impact of the restrictions aimed at slowing the spread of COVID-19. These measures are subject to change as the situation progresses. Tax Measures Tax filing and payment deadlines1 The…